Background: While textile and apparel (T&A) 1 are known as a global sector, T&A trade remains largely regional-based, i.e., countries import and export T&A with partners in the same region (Dicken, 2015, pp.451-469). However, the T&A regional trade patterns, their evolution trajectory, and related factors remain largely unknown. This study aims to explore the T&A regional trade patterns and their affecting factors, focusing on three primary T&A regional trade blocs in the world: Asia, EU, and WH (Dicken, 2015, pp.451-469). The findings will fulfill a critical research gap and significantly enhance our understanding of the nature of T&A trade and its supply chains in today's world economy. As T&A regional trade often involves regional trade agreements (RTAs), the findings will also provide valuable inputs on the sectoral impacts of these RTAs and supporting related trade policymaking (Keough & Lu, 2020). 1 In this article, "Textile" refers to the Standard International Trade Classification (SITC) Revision 3 code 65. "Apparel" refers to the SITC Revision 3 code 84 (UNCTAD, 2020). 2 The scope of "Asia", "EU", and "WH" follows the country classification by World Bank (2021).
BackgroundThis study aims to explore the key factors that affect U.S. fashion companies' choice of China as a sourcing base for apparel and their textile intermediaries. Existing studies on related topics mostly looked at country-level macro trade data or focused on finished garments only (Guan, Xu, Jiang, & Jiang, 2019;Datta & Kouliavtsev, 2020). Instead, we conducted a firm-level analysis of VF Corporation's entire apparel supply chain in 2020, which included a total of 327 factories worldwide, making either finished garments or their textile inputs (VF Corporation, 2021). A case study on VF Corporation (VF), one of the most historical and largest U.S. apparel corporations, will significantly enhance our understanding of U.S. fashion companies' latest China sourcing strategy and offer unique insights into today's T&A supply chains. Literature reviewA review of existing literature suggests a few factors that may affect U.S. fashion companies' selection of China as a T&A souring base. First, as China has one of the world's most complete T&A supply chains (Lopez-Acevedo & Robertson, 2012), U.S. fashion companies are likely to source from China for apparel items with a longer and more sophisticated production process (H1). Second, China is heavily involved in an Asia-based regional textile and apparel production network (Lu, 2019). Thus, U.S. fashion companies are more likely to source from China when other production processes across the apparel supply chain also occur in Asia (H2). Third, U.S. fashion companies likely use China more as a textile supplier than an apparel supplier today (H3). Notably, while U.S. fashion companies are increasingly moving sourcing orders from China to other Asian countries for finished garments, many of these garments still contain textiles supplied by China (Goto, 2017;Ngo, 2017). Additionally, product pricing and social and environmental compliance risks matter for vendor selection (Yadlapalli, Rahman, & Rogers, 2019). However, researchers could not conclude whether considering these two factors would increase or decrease T&A sourcing from China (Guan, et al.;Lu, 2020). Methods and dataLogistic regression was performed to evaluate the key factors that affect VF's selection of China as a sourcing base over other suppliers for apparel products and their textile intermediaries. The logit model uses China (souring from a Chinese T&A factory =1 and otherwise=0) as the binary dependent variable and includes six independent variables corresponding to the hypotheses: • Supply chain length (an apparel item's total production stages as specified by VF) • Asia% (the percentage of an apparel item's total production stages that occurred in Asia)
Today, fashion companies consider a long list of factors when deciding where to source their apparel products, ranging from cost, speed to market, flexibility to the risk of social and environmental compliance (Ha-Brookshire, 2017). This study aims to quantitatively evaluate the influence of primary sourcing factors on fashion companies' determination of apparel sourcing destinations. The findings will fulfill a critical research gap and enhance our understanding of fashion companies' sourcing criteria and their sourcing behaviors in today's business environment. The results will also offer valuable new perspectives to understand the secret of becoming a preferred apparel sourcing base.
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